According to Chainalysis, 2019 was very good for crypto-Ponzi schemes and cryptocurrency scams. The report claimed that scammers managed to bamboozle their victims of over $4.3 billion. Chainalysis is a reputable blockchain analysis firm that monitors illegal crypto transactions.
Moreover, the firm released 2020 State of Crypto Crime report that details the types and extent of cryptocurrency scams affecting the cryptocurrency industry. If there is anything to learn from this report, is that the anonymous and decentralized nature of cryptocurrencies makes it an interesting opportunity for millennials to make quick wealth; mostly from people hailing from underdeveloped countries.
However, all is not lost in the long run. Firms like Chainalysis with the right resources and infrastructure can ascertain promptly; the number of digital currencies transactions that can be traced back to an illegal source. The report reveals that over $11.5 billion worth of cryptocurrencies can be associated with criminal activities. This amounts to just over 1.1% of the total cryptocurrency transactions of the year 2019.
“2019 was the biggest year for cryptocurrency scams yet. After [a] drop in scam revenue in 2018, scammers more than tripled their revenue in 2019, bringing in $4.30 billion worth of cryptocurrency from millions of victims,” the Report reads.
In addition, huge scams such as the OneCoin and PlusToken scams are believed to be accountable for the huge price swings. This two turned-up to be the most large-scale scams that hoodwinked victims a huge amount of illegal crypto. As per the report, a large percentage of $4 billion of illegal transactions, trebled since 2018 can be accredited to only two huge Ponzi schemes.
Scamming Liquidation Strategy
Furthermore, the Chainalysis report highlights that scammers most of the time get potential investors to believe in their token. Using this tactic, they get then into investing a lot of cash after promising big payouts.
In conclusion, the report reveals that exchanges are the most actually the most important source of cryptocurrency scams. 57.6% of illegal cryptocurrency earned through scams and Ponzi schemes are cashed in through cryptocurrency exchange platforms.